NY State Senate Bill 2015-S6768

Senate Bill S6768

2015-2016 Legislative Session

Increases from 20% to 40%, the tax credits for premiums paid for long-term care insurance premiums during certain taxable years

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Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Feb 18, 2016	referred to investigations and government operations

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2015-S6768 (ACTIVE) - Details

See Assembly Version of this Bill:: A9345
Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd §§190, 210-B, 606 & 1511, Tax L
Versions Introduced in 2017-2018 Legislative Session:: S1453, A6657

2015-S6768 (ACTIVE) - Summary

Increases from 20% to 40%, the corporation, business franchise, personal income and insurance corporation tax credits for premiums paid for long-term care insurance premiums during the 2015, 2016, 2017 and 2018 taxable years.

2015-S6768 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S6768

 TITLE OF BILL :  An act to amend the tax law, in relation to
increasing the tax credits for premiums paid for long-term care
insurance

 PURPOSE OR GENERAL IDEA OF BILL :

The purpose of this bill is to provide additional tax credit
inducements to encourage individuals to either retain long term care
(LTC) insurance coverage or encourage more, currently non-enrolled
individuals, to purchase long term care (LTC) insurance.

The LTC insurance market has recently become much more unstable due
to: a) significant reductions in the number of individuals that have
purchased coverage or who choose to continue to retain such coverage,
b) a significant reduction in the number of insurance carriers that
offer LTC insurance, and c)the approximately 50% increase in LTC
insurance premiums that has been granted in 2015 and the likely
possibility of vast increases being imposed in policy years 2016 and
beyond.

This enhanced tax credit is available for the next three years and
applies retroactively from January 1, 2015 to December 31, 2018 so
that New York State will have the sufficient time needed to develop
and enact new methodologies to help stabilize the currently unstable

and volatile LTC insurance market.

 SUMMARY OF SPECIFIC PROVISIONS :

Section 1: Amends Tax Law section 190 to increase the corporate income
tax credit for purchasing long term care insurance from 20% of the
premium paid to 40%. This enhanced tax credit shall be applicable for
premiums paid from January 1, 2015 to January 1, 2019.

Section 2: Amends Tax Law section 210-B to increase the franchise
income tax credit incentive for the computation income tax from 20% to
40% of the premium paid for LTC insurance.

Section 3: Amends Tax Law section 606 to increase the personal income
tax credit from 20% to 40% of the cost of premiums paid to purchase
LTC insurance.

Section 4: Amends Tax Law section 1511 to add the enhanced income tax
credit for insurance franchisees from 20% to 40% of the cost of
premiums for LTC insurance.

 JUSTIFICATION :

The purpose of this bill is to temporarily enhance the current 20% LTC
premium income tax credit to 40%, retroactively to January 1, 2015.
The underlying goal of this bill is to help to offset recently
approved LTC insurance premium rate increases for the next upcoming
three years. Some of the recently approved LTC insurance rates
increased by over 50%. Many current LTC policy holders are over the
age of 55 and cannot afford this drastic premium rate increase. The
enhanced tax credit from 20% to 40% will give temporary relief to
those that currently have LTC insurance, help to stabilize the market,
and encourage younger healthier lives to think about purchasing LTC
policies which will help curtail any additional future premium rate
increases.

This bill, by increasing the current 20% LTC premium income tax credit
to 40%, retroactively, to January 1, 2015, will help to offset most or
all of the recently approved LTC insurance rate increases granted to

insurers by the Department of Financial Services (a three year policy
period) for the next three years.

This measure's provisions sunset in three years on 12/31/18. The
reason for the three year sunset is to give sufficient time for the
Legislature and Governor to develop and implement new methodologies to
help stabilize the LTC insurance market over the long term. While this
bill does double the income tax credit for those premiums paid by
insureds, it should not be a significant fiscal hit on the State
Budget. This is because with the enactment of this measure, many
covered persons will continue to keep their LTC policies. If, however,
this measure is not enacted, many LTC policy insureds will let such
policies laps and should that occur, any long term care or nursing
home care required by such persons would not be financed by private
insurance carriers, but by public Medicaid payments that are supplied
by State and local governments.

As the general population becomes older, more and more individuals are
looking for affordable ways to finance their nursing home and long
term care needs. While there are available policies that provide
payment for long term care, more products should be authorized under
New York law so that consumers will have more types of insurance
coverage available to meet their specific needs or the needs of their
family and to increase the selection of adult care facilities such
insureds may go to.

In addition, encouraging more individuals to finance their own long
term care, will help to curtail future expenditures from the State's
Medicaid program, which currently finances the lion's share of the
provision of long term care in this State.

 PRIOR LEGISLATIVE HISTORY :

New bill.

 FISCAL IMPLICATIONS :

It is the intent of this bill to stabilize the LTC insurance market so
that it can remain an important financing mechanism to finance end of
life, home health, and nursing home care.  This, in the end, should
help to decrease State Medicaid expenditures.

 EFFECTIVE DATE :
This act shall take effect on January 1, 2015.

2015-S6768 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6768

                            I N  S E N A T E

                            February 18, 2016
                               ___________

Introduced  by  Sens.  AVELLA, SAVINO, CARLUCCI, KLEIN -- read twice and
  ordered printed, and when printed to be committed to the Committee  on
  Investigations and Government Operations

AN  ACT  to amend the tax law, in relation to increasing the tax credits
  for premiums paid for long-term care insurance

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Subdivision 1 of section 190 of the tax law, as amended by
section 102 of part A of chapter 59 of the laws of 2014, is  amended  to
read as follows:
  1.  General.  A  taxpayer  shall  be  allowed a credit against the tax
imposed by this article equal to twenty  percent  of  the  premium  paid
during the taxable year for long-term care insurance; PROVIDED, HOWEVER,
THAT  FOR  TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND FIFTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN, SUCH CRED-
IT SHALL BE FORTY PERCENT OF THE PREMIUM PAID DURING  THE  TAXABLE  YEAR
FOR  LONG-TERM  CARE INSURANCE. In order to qualify for such credit, the
taxpayer's premium payment must be for the purchase of or for continuing
coverage under a long-term care insurance policy that qualifies for such
credit pursuant to section one thousand one  hundred  seventeen  of  the
insurance law.
  S  2. Paragraph (a) of subdivision 14 of section 210-B of the tax law,
as added by section 17 of part A of chapter 59 of the laws of  2014,  is
amended to read as follows:
  (a)  General.  A  taxpayer  shall  be allowed a credit against the tax
imposed by this article equal to twenty  percent  of  the  premium  paid
during the taxable year for long-term care insurance; PROVIDED, HOWEVER,
THAT  FOR  TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND FIFTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN, SUCH CRED-
IT SHALL BE FORTY PERCENT OF THE PREMIUM PAID DURING  THE  TAXABLE  YEAR
FOR  LONG-TERM CARE INSURANCE.  In order to qualify for such credit, the
taxpayer's premium payment must be for the purchase of or for continuing
coverage under a long-term care insurance policy that qualifies for such

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13127-01-5

S. 6768                             2

credit pursuant to section one thousand one  hundred  seventeen  of  the
insurance law.
  S  3. Paragraph 1 of subsection (aa) of section 606 of the tax law, as
amended by section 1 of part P of chapter 61 of the  laws  of  2005,  is
amended to read as follows:
  (1)  Residents.  A  taxpayer shall be allowed a credit against the tax
imposed by this article equal to twenty  percent  of  the  premium  paid
during the taxable year for long-term care insurance; PROVIDED, HOWEVER,
THAT  FOR  TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND FIFTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN, SUCH CRED-
IT SHALL BE FORTY PERCENT OF THE PREMIUM PAID DURING  THE  TAXABLE  YEAR
FOR  LONG-TERM CARE INSURANCE.  In order to qualify for such credit, the
taxpayer's premium payment must be for the purchase of or for continuing
coverage under a long-term care insurance policy that qualifies for such
credit pursuant to section one thousand one  hundred  seventeen  of  the
insurance  law.  If  the  amount  of  the  credit  allowable  under this
subsection for any taxable year shall exceed the taxpayer's tax for such
year, the excess may be carried over to the following year or years  and
may be deducted from the taxpayer's tax for such year or years.
  S  4. Paragraph 1 of subsection (m) of section 1511 of the tax law, as
amended by section 21 of part B of chapter 58 of the laws  of  2004,  is
amended to read as follows:
  (1)  A  taxpayer  shall be allowed a credit against the tax imposed by
this article equal to twenty percent of  the  premium  paid  during  the
taxable  year  for long-term care insurance; PROVIDED, HOWEVER, THAT FOR
TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN
AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN, SUCH  CREDIT  SHALL  BE
FORTY  PERCENT OF THE PREMIUM PAID DURING THE TAXABLE YEAR FOR LONG-TERM
CARE INSURANCE.  In order to qualify for  such  credit,  the  taxpayer's
premium  payment  must be for the purchase of or for continuing coverage
under a long-term care insurance policy that qualifies for  such  credit
pursuant  to section one thousand one hundred seventeen of the insurance
law.
  S 5. This act shall take effect immediately and  shall  be  deemed  to
have been in full force and effect on and after January 1, 2015.

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Senate Bill S6768

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Sponsored By

Tony Avella